Audit of Cash Balances

Audit of Cash Balances - Follow up on outstanding checks...

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Audit of Cash Balances
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Basics Cash affects all transaction cycles except Inventory and Warehousing Types of accounts General cash account Imprest payroll account Branch bank accounts Imprest petty cash fund Existence, Accuracy, and Completeness
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Bank Reconciliations Reconciliations are critical Each account Timely Performed by an independent individual Reconciler should open bank statements Physical control should be maintained over cancelled checks, duplicate deposit slips and bank statements until reconciliation is performed
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Reconciliations Compare cancelled checks w/ CD records Examine cancelled check for signature, endorsement Compare bank deposits w/ CR records Account for numerical sequence of checks Review month-end interbank transfers
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Unformatted text preview: Follow up on outstanding checks Tests of the Reconciliation Test mathematical accuracy Agree beginning balance on bank rec. with the confirmation/cutoff statement Trace checks written before y/e to list of o/s checks on bank rec. Investigate large checks that do not clear the bank within 5-10 business days after y/e Trace DIT to cutoff statement Bank Confirmations Not required, but commonly used Inactive bank accounts Impact on audit of liabilities Cutoff Statements What is a cutoff statement? Why do auditors ask for them? Are they required? Fraud Procedures Extended tests of bank reconciliations Proof of cash Tests of interbank transfers...
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Audit of Cash Balances - Follow up on outstanding checks...

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